How fast do we need?

REGULATORY DIVIDE: All things considered, Republicans remained remarkably arm-in-arm in getting their tax cut enacted, in what was basically record time.

But this issue of whether the White House Office of Management and Budget should play a larger role in crafting the regulations underpinning the new tax law has put a few cracks in that unity. House Ways and Means Chairman Kevin Brady (R-Texas) has been noticeably chilly to the idea, maintaining that the Treasury Department should remain the driving force behind the rules. And some former senior GOP federal officials have expressed concern that bringing OMB into the mix will only slow down the process, making life more difficult for the businesses and people who will rely on that guidance.

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So what's the response of the 17 conservative groups, generally big supporters of the new tax cut, that signed a letter advocating for OMB to have more oversight over the tax rules? A couple of those groups essentially told Morning Tax that there’s too much concern about how fast the regulations get done. "To the extent we've set up OMB review to help create better rules and political accountability, I'd rather have a good rule than a fast one,” said James Valvo of the Cause of Action Institute, who wrote a paper on IRS rulemaking that has helped spur this debate. A spokeswoman for Americans for Prosperity, part of the Koch political network, sounded a similar note on getting the rule right being better than getting it done quickly — adding that giving OMB more power over Treasury and IRS rules is standard practice with other agencies and would assist the group’s overarching goal of reining in government. (Two other groups that Morning Tax reached out to, neither of them exactly wallflowers, have yet to lay out their reasoning.)

Pete Sepp of the National Taxpayers Union told Morning Tax that it was essential for the Trump administration to find a balance between “a thorough review process and the need for speedy guidance.” NTU met with David Kautter, the interim IRS chief, recently to discuss its recommendations to more broadly revamp how the tax collector administers the code, which includes more OMB oversight of Treasury and IRS regulations. “At NTU, we don't expect every minute detail to be subject to some exhaustive inquisition. What we're hoping to see is a cultural shift that puts somewhat more emphasis on transparency and consultation processes, ones that encourage rather than impede better rulemaking,” Sepp told Morning Tax in an email.

THANKS FOR COMING BACK for another edition of Morning Tax, where it’s apparently pretty tough sledding for some of Sunday night’s top Oscar nominees. Their $100,000 swag bags could come with a $50,000 tax bill — if they live in California, of course.

It’s a day of too many stars gone before their time: The country singer Patsy Cline died at 30 in a plane crash in 1963, and the 33-year old John Belushi died of a drug overdose in 1982.

MORE ON TARIFFS: If you were thinking that President Donald Trump might change his mind on throwing around tariffs on foreign steel and aluminum as soon as this week — well, don’t bet on it, our Doug Palmer and Zachary Warmbrodt report. Not only that, Commerce Secretary Wilbur Ross and Peter Navarro, a White House trade official, made the Sunday show rounds and — in sometimes-combative interviews — predicted that there would be no exemptions for allies like Canada, the European Union, Japan or South Korea. Trump himself raised the stakes by threatening to raise tariffs on the EU’s auto exports on Saturday, after Europe vowed retribution on American exports like bourbon and Harley-Davidson motorcycles.

And yet the free traders in the administration, like Gary Cohn at the National Economic Council, hope they still have time to change Trump’s mind and that at the very least there will be some key exemptions.

The electoral calculus: This tariff talk has unnerved some Republicans, Rachael Bade and Burgess Everett report. “Republicans plan to brag about the economy in midterm campaigns in hopes of countering Trump’s unpopularity, touting a strong stock market, low unemployment rate and — most importantly — their increasingly popular tax legislation. But Trump’s suggestion Saturday that he might slap penalties on European cars, in addition to the tariffs on aluminum and steel he already promised, could upend that strategy completely, Republicans say.”

ABOUT THAT STRATEGY: There’s no doubt that the GOP tax cut is far, far more popular than it was when it passed in December. But does that really mean it will be the kind of asset that Republicans think it will be? A special congressional election in a Pittsburgh-area district, where the Democratic nominee, Conor Lamb, has a real shot to flip a Republican seat, could offer some clues. “Here’s how tricky things have gotten for Republicans: GOP outside groups have dramatically scaled back their ads promoting the party’s tax cut, with the messaging barely moving the needle in the district’s working-class confines,” National Journal’s Josh Kraushaar notes, adding that “there are indications that conservative-minded voters in this district value government entitlements as much as tax cuts.”

Money keeps coming: The American Action Network, a group with ties to GOP leadership, is out with the latest part of a $1 million influx to boost the tax cut, which will go toward television and digital ads in two dozen House districts — largely to Republican incumbents facing tough races, like Rep. Brian J. Mast (R-Fla.).

WHAT’S GOING ON IN WEST VIRGINIA? The teachers strike there enters its eighth day today, and there’s increasing focus on how much the state’s tax policy has had an impact on getting to this point.

For instance, HuffPost makes the case that tax cuts led directly to the point of teachers leaving the job to seek raises and more stable health insurance. In recent years, West Virginia shrunk its corporate rate from 9 percent to 6.5 percent, got rid of its business franchise tax and alternative minimum tax, and scrapped its sales tax on groceries, while also implementing a new family tax credit. “They’re saying we can’t afford it,” said Ted Boettner of the West Virginia Center on Budget and Policy, referencing lawmakers’ response to the teachers’ demands. “Well, we can’t afford it because we’ve done these large tax cuts.”

Nonsense, responded Sen. Joe Manchin (D-W.Va.), who helped bring some of those tax cuts as the state’s governor. “That's absolutely crazy,” Manchin said on CNN’s “State of the Union,” adding that teachers’ pay increased under his watch. “Very little has been done since then. So, that is absolutely erroneous.”

FIGHTING FOR KOMBUCHA: Rep. Jared Polis (D-Colo.) and Sen. Ron Wyden (D-Ore.) are hoping this will be the year for their bill to exempt kombucha brewers from an excise tax on alcoholic drinks, Tax Notes’ David Van Den Berg reports. Polis, among others, had pushed to get that bill attached to the GOP tax bill late last year. The bills in both the House and the Senate have bipartisan support, and workers in the kombucha industry said the measure would give them peace of mind that issues on the supply chain won’t cause their product to inch above the alcohol amount needed to get hit with the excise tax.

INTERNATIONAL UPDATE

NEW NORMAL: British baby boomers better get used to the idea of higher wealth taxes, according to a new think tank study. The Resolution Foundation’s report found that the U.K. will inevitably need to lean more on revenues to cope with higher health care costs, Reuters notes. In all, spending on health, education and social security is projected to rise about 20 billion pounds ($28 billion) a year in the near future, and to 60 billion pounds a year within a couple decades. "The time has come when we boomers are going to have reach into our own pockets. The alternative could be an extra 15 (pence) on the basic rate of tax, paid largely by our kids,” said David Willetts, the Resolution Foundation’s chairman and a former Conservative government minister.

STATE NEWS

WE’RE NO. 2: Amazon will start collecting taxes starting in April on third-party sales to Pennsylvania, CNBC reports. As it stands, that only happens in Washington, Amazon’s home state. Treasury Secretary Steven Mnuchin is among those who have criticized Amazon’s frequent policy of charging sales tax for items it sells directly, but not for products bought on its marketplace. Amazon made the decision to collect on third-party sales in Pennsylvania after the state passed a new law requiring that online retailers collect sales tax even if they don’t have a physical location in the Keystone State.

QUICK LINKS

Germany and France press ahead with a common corporate tax system after U.S. tax cuts.

The European Union will unveil a plan to tax big technology companies' revenue between 2 percent and 6 percent, the French economy minster said.

About The Author : Bernie Becker

Bernie Becker is a tax reporter for POLITICO Pro, where he is primarily responsible for writing the Morning Tax tipsheet.

He previously covered taxes for The Hill, and was an editorial assistant for The New York Times in Washington.

A native of Martinsville, Va., Becker has degrees from the College of William and Mary and the University of Maryland. He now lives in Northwest D.C. with his wife and young daughter. His hobbies include running, reading history books, eating spicy food and watching his daughter chase his cat.